(Reuters) - Long Beach, New York, an oceanfront enclave on Long Island, will cut spending by 25 percent and sell $6 million of notes to help reduce a $10.25 million deficit, city officials said on Wednesday.
That deficit, for the fiscal year ending on June 30, equals more than 12 percent of all planned spending, city officials estimated in mid-March.
City Manager Jack Schnirman, a Democrat who took office in January, has eliminated nine jobs, cut his salary by $8,315 to just under $158,000 and reduced overtime spending by $246,000 from last year.
"Only absolutely essential items will be approved for purchase at this juncture," Spokesman Gordon Tepper said in a statement. The sale of revenue anticipation notes is expected to take place in mid-April.
Moody's Investors Service in December downgraded Long Beach's credit by five notches to one level above junk, city officials said, which puts its credit rating at Baa3.
The multinotch downgrade earned Long Beach a place on the list of troubled municipalities around the country whose credits are closely followed in the $3.7 trillion municipal market because of their potential to rattle investors.
Vowing to fix Long Beach's deficit before the start of the new fiscal year to avoid losing the ability to sell debt, Schnirman in mid-March said targets would be set for both lower revenue estimates and spending cuts.
Left unchecked, the deficit would be nearly $20 million by 2015, the report projected.
(Reporting by Joan Gralla, Editing by G Crosse)